Financing Child Care in the United States - Ewing Marion Kauffman ...

GENERATING PUBLIC REVENUE LOCAL PROPERTY TAXES
CHILDREN’S SERVICES FUND:
PROPOSITION J
(SAN FRANCISCO, CALIFORNIA)
DESCRIPTION
Through a public referendum (Proposition J), San
Francisco’s city charter was amended in two ways. First, a
baseline of funding for children’s services (a level below
which funding could not fall unless there was a decrease
in aggregate city appropriations) was established.
Second, a percentage of local property tax dollars was
set aside for children’s services. The set–aside was
$.0125 of every $100 of property taxes during the first
year and $.025 of every $100 for the remaining nine
years.
WHEN ESTABLISHED
Proposition J was passed in November 1991 and was
scheduled to remain in effect for 10 years. It was being
placed on the ballot again in 2000 for a 30–year period,
with an increased set–aside of $.03/$100.
ANNUAL AMOUNT
The baseline stands at $50 million. The set–aside
generated $18.3 million in FY1999–2000. Of the
set–aside funds, 25 percent was reserved for child care,
which amounted to about $4.5 million to support child
care and early education services in FY1999–2000.
SERVICES FUNDED
The set–aside funds, referred to as the Children’s Fund,
are allocated into four broad categories, each receiving
25 percent of available dollars: 1) child care, 2) health
and social services, 3) job–readiness and 4) delinquency
prevention, education, libraries and recreation. The
Children’s Fund cannot be used for law enforcement
services, the purchase of property or for any service that
benefits children only incidentally or as members of a
larger population including adults.
Funds from the four categories are allocated to: 1) early
childhood development (targeting children from birth
through age 5), 2) youth development (targeting children
and youth from ages 6 through 17) and 3) family support
(targeting families with children of all ages). The $4.5
million in child care funds for 1999–2000 was used to
sponsor health insurance for child care teachers, to
increase Head Start “wrap–around” services, to create
full–day full–year programs, and for other related early
childhood development activities.
HOW FUNDS DISTRIBUTED
The Children’s Fund is administered by the Mayor’s Office
of Children, Youth and Their Families. MOCYF is
responsible for developing a children’s services plan,
issuing a request for proposals to community–based
organizations, staffing a Citizen Allocation Committee to
review proposals, negotiating contracts for services
provided by community agencies and city departments,
monitoring contracts and working with an independent
organization to evaluate funded programs. About 90
percent of the child care funds are distributed to
community–based organizations.
POPULATION SERVED
The Children’s Fund is limited to serving children and
youth under the age of 18. Child care funds are targeted
for two groups: children under 6 and children 6 to 18,
with priority given to serving children from low–income
families. Families throughout the city benefit.
STRATEGIC CONSIDERATIONS
• Amending the city charter through a public referendum
(rather than having the city council pass legislation) is
a costly and labor–intensive process. Thousands of
signatures must be obtained just to get the referendum
on the ballot. Once on the ballot, the referendum must
be approved by a majority of voters. A referendum can,
however, be an excellent way of organizing the citizenry
around children’s issues in general as well as passing a
specific amendment. Coleman Advocates for Children
and Youth, the lead organization in the effort to
establish the Children’s Fund, carefully weighed the
costs and benefits of the referendum process and
decided the results were worth the effort. In addition to
engaging the public around children’s issues,
Proposition J sought to end the annual budget battles
over funds for children’s services, mandate a change in
public priorities, and institutionalize the protection and
expansion of expenditures for children.
• Proposition J sets aside funds for a broad array of
children’s services — not just child care or early
education — and was therefore able to garner a broad
base of support.
• The mandated baseline and set–aside makes annual
budget battles unnecessary.
• The law was carefully drafted to ensure that baseline
funds would not be supplanted and that the new funds
for children’s services would be used for new
programs. Even with an established baseline, however,
funds can be shifted. For example, child care funds
could be shifted to child health care, since both are in
the baseline.
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